It’s
no secret that we’ve seen an explosion in affordable housing
development & investment, nearly directly tracking, if not perhaps,
exceeding that of the rest of the commercial real estate investment
space. However, the relatively niche space of affordable housing
presents its own industry dynamics that present a ripple effect as we
move into the latter stages of this current economic cycle and the
advent of the next cycle.
Most notably, that due to government involvement – particularly its desire to increase affordable housing stock across the board in addition to improving existing inventory – there will be a strong push for increased development well after the demand curve and underlying economic basis for conventional multifamily housing tails-off (i.e. – due to an economic downturn of some sort).
My professional focus is on corporate infrastructure and people that drive these companies. For that matter, we have an inverse curve. Increasing demand for housing and fewer qualified professionals to perform the work. In the near term, compression due to talent being lured-away by the possible dream of more lucrative partnership in market-rate housing development and in the longer-term, particularly as we enter the next cycle – due to mass retirement of many of the iconic leaders in the affordable space in addition to their prime lieutenants who may have been fortunate enough to capitalize themselves personally during the current boon.
My colleagues have waxed at length in other posts about smart hiring practices in the wake of the current market realities and can be found here (https://www.linkedin.com/pulse/article/20140918205243-42451423-recruitment-202-for-the-tightest-employment-market-in-a-decade?trk=prof-post).
I’d like to be more specific to the realities and particulars of affordable housing and what options are available. I feel even more compelled because several of my clients, whom are rather solid, slow growth “middle America” affordable developers that amongst all three of them have hired no fewer than 25 development, investment and construction professionals just in the past 16 months!
What’s left then, in the traditional hiring bin, are essentially the “dregs.” And to-boot, you are a growing affordable housing company that won’t settle for seconds or thirds. What are you to do?
First, I strongly recommend white listing what the key traits required from any professional who has succeeded in your organization in the past. My guess is that “industry expertise” falls lower on the list, if at all. Core characteristics such as, integrity, ethics, commitment, relationship/network(s), geographic relevance/knowledge, communication, success orientation and so on probably fall in various rankings higher on your list. Pick what suits you – and there may be more. Once you’ve developed the core characteristics then you can move-on to the technical tool kit required.
In a classic “kid in the candy store” scenario, we’ll always been inclined to hire the best of the best regardless of price or availability. At this present time, that is just not the case. If you are guided by and are willing to adhere to your core characteristics as above – you can then be (slightly) more generic in your consideration of technical skills. Granted, we must assume that you or other tenured execs at your company are willing to (gasp!) mentor and train were there may be deficiencies. In the interest of time, I cannot list all the development and investment disciplines and technical skillsets, so I’ll offer some real world examples for illustration. So, what about; real property brokers as acquisitions managers, debt-side professionals as in-house finance, GC guys as in-house CM’s, civil engineers and/or architects as development associate/managers, and the list might go on.
At the end of the day, it’s about relationships and personal capacity to accept/manage work load. The above scenarios are not perfect. However, we all know the real world is not perfect either. If not myself, one of my colleagues has been involved in the health debate of the pros/cons of this way of thinking – do not hesitate to call and discuss.
- Butch Edlinger
Most notably, that due to government involvement – particularly its desire to increase affordable housing stock across the board in addition to improving existing inventory – there will be a strong push for increased development well after the demand curve and underlying economic basis for conventional multifamily housing tails-off (i.e. – due to an economic downturn of some sort).
My professional focus is on corporate infrastructure and people that drive these companies. For that matter, we have an inverse curve. Increasing demand for housing and fewer qualified professionals to perform the work. In the near term, compression due to talent being lured-away by the possible dream of more lucrative partnership in market-rate housing development and in the longer-term, particularly as we enter the next cycle – due to mass retirement of many of the iconic leaders in the affordable space in addition to their prime lieutenants who may have been fortunate enough to capitalize themselves personally during the current boon.
My colleagues have waxed at length in other posts about smart hiring practices in the wake of the current market realities and can be found here (https://www.linkedin.com/pulse/article/20140918205243-42451423-recruitment-202-for-the-tightest-employment-market-in-a-decade?trk=prof-post).
I’d like to be more specific to the realities and particulars of affordable housing and what options are available. I feel even more compelled because several of my clients, whom are rather solid, slow growth “middle America” affordable developers that amongst all three of them have hired no fewer than 25 development, investment and construction professionals just in the past 16 months!
What’s left then, in the traditional hiring bin, are essentially the “dregs.” And to-boot, you are a growing affordable housing company that won’t settle for seconds or thirds. What are you to do?
First, I strongly recommend white listing what the key traits required from any professional who has succeeded in your organization in the past. My guess is that “industry expertise” falls lower on the list, if at all. Core characteristics such as, integrity, ethics, commitment, relationship/network(s), geographic relevance/knowledge, communication, success orientation and so on probably fall in various rankings higher on your list. Pick what suits you – and there may be more. Once you’ve developed the core characteristics then you can move-on to the technical tool kit required.
In a classic “kid in the candy store” scenario, we’ll always been inclined to hire the best of the best regardless of price or availability. At this present time, that is just not the case. If you are guided by and are willing to adhere to your core characteristics as above – you can then be (slightly) more generic in your consideration of technical skills. Granted, we must assume that you or other tenured execs at your company are willing to (gasp!) mentor and train were there may be deficiencies. In the interest of time, I cannot list all the development and investment disciplines and technical skillsets, so I’ll offer some real world examples for illustration. So, what about; real property brokers as acquisitions managers, debt-side professionals as in-house finance, GC guys as in-house CM’s, civil engineers and/or architects as development associate/managers, and the list might go on.
At the end of the day, it’s about relationships and personal capacity to accept/manage work load. The above scenarios are not perfect. However, we all know the real world is not perfect either. If not myself, one of my colleagues has been involved in the health debate of the pros/cons of this way of thinking – do not hesitate to call and discuss.
- Butch Edlinger
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